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December 07, 2009 11:55 PM UTC

Understanding the Initiatives: Part 1 (Prop 101)

  • 49 Comments
  • by: TheBell

( – promoted by Colorado Pols)

The Bell Policy Center is analyzing the initiatives currently under discussion on Pols, and first up is Proposition 101. First, though, a word about nomenclature. Thanks to a change in Colorado law, ballot measures that change laws will now be called propositions while those that amend the constitution will be called amendments.

Proposition 101 is one of three anti-government measures proposed for the 2010 ballot. At a time when the state is in a deep financial hole, Prop 101 will only dig a deeper and darker hole. As the rest of the nation comes out of a recession, this measure has the potential to permanently lock in recessionary conditions in Colorado.

It is not going too far to say that Prop 101 could close down some community colleges, eliminate nearly all support for higher education, ensure that roads and bridges fall into disrepair and risk federal matching dollars for programs such as Medicaid. That’s just for starters.

In a larger sense, Prop 101 and the other two proposals threaten the very notion of government — the idea that public structures are critically important in supporting a growing, thriving society and economy.

Here’s a thumbnail description of the impact of Proposition 101. Below that is our preliminary analysis of the measure. We are digging further into the numbers and the implications and will release a more complete analysis soon.

Proposition 101: This is a grab bag of tax cuts and revenue reductions that somehow made it through the single-subject requirement for ballot proposals. In broad strokes, it would eliminate the FASTER plan for transportation funding, in part by cutting vehicle registration fees to $2 for new vehicles and $1 for older vehicles. It would immediately reduce the state’s income tax from the current rate of 4.63 percent to 4.5 percent, and over time cut it to 3.5 percent. And it would eliminate all taxes and fees on telephone and satellite and Internet services, except for 911 fees. A conservative estimate says that this initiative will cost the state more than $1.5 billion a year (current value).  

Preliminary Analysis of Proposition 101

Proposition 101 (“Concerning limits on government charges”) is intended to drastically reduce a wide range of state and local taxes and fees in Colorado.

The first sentence of the measure reads, “This voter-approved revenue change shall be strictly enforced to reduce government revenue.” Proponents say they intend for this language to be interpreted according to the provision in TABOR that defines spending limits. If so, then proponents clearly intend to repeal Referendum C, passed by voters in 2005, and impose a new, lower state spending limit moving forward. And just like before Ref C, this new limit would ratchet down state spending after recessions.

Proponents also intend the measure to impose new, lower spending limits in all cities and counties in Colorado.

Based on preliminary estimates, when fully implemented the provisions of Proposition 101 would reduce state income tax revenues by $1.2 billion per year (current value), state and local revenues from a range of sales taxes and vehicle fees by well over $1.1 billion per year (current value), and state revenues from telecommunications charges and fees by $4.5 million per year.

When fully implemented, the provisions of Proposition 101 would cut state revenue by at least:

1. $1.2 billion in income tax revenues (rate reduced from 4.63% to 3.5%)

2. $179 million in transportation revenues from elimination of FASTER fees

3. $164 million in transportation revenues by cutting registration, license and title fees to $10 per vehicle

4. $100 million in sales taxes from exempting $10,000 in vehicle value from sales taxes

5. $22 million by eliminating sales taxes on rental vehicles

6. $4.5 million in telecommunications fees by prohibiting all fees, except those to fund 911 services. Another $72 million that is used to subsidize telecommunications services in rural areas would be cut, but these funds go to a private escrow account and not the state.

Total equals $1.7 billion (current value)

When fully implemented, the provisions of Proposition 101 would cut local government revenue by at least:

1. $500 million in specific ownership taxes by cutting them to $2 per new vehicle and $1 per used vehicle

2. $100 million in sales taxes from exempting $10,000 in vehicle value from sales taxes (based on an average 3 percent sales tax rate for local governments)

3. $22 million by eliminating sales taxes on rental vehicles (based on an average 3 percent sales tax rate for local governments)

Total equals $622 million (current value)

Totals do not include the loss of state and local sales taxes on leased vehicles because we were not able to gather the necessary data on vehicle leases to calculate this amount.

Our calculations for the amount of sales taxes reduced by the $10,000 exemption on the value of a vehicle are based on sales of new and used vehicles at Colorado franchised new vehicle dealers only. They do not include sales by independent auto dealers and private individuals.  

Comments

49 thoughts on “Understanding the Initiatives: Part 1 (Prop 101)

  1. Wait, the people behind this are saying they’ll take care of the repairs and other revenues that this initiative would eliminate, right?

    Oh, they’re not? It’s kind of idiotic then.

    1. If you sell off all the state’s roads and bridges to a few lucky private entities, not only will you raise revenue, but the new owners will raise the money to take care of them by charging tolls.

      Or just pocket the money, and declare bankruptcy and become judgment-proof when the bridges fall down and sinkholes swallow cars.

  2. “6. $4.5 million in telecommunications fees by prohibiting all fees, except those to fund 911 services.”

    Every time someone looks at their phone bill, they will say: “Damn it, I have a chance to get rid of these annoying fees.”

    1. But even I hate telecom fees.  I don’t think you are correct, but you have found the best thread to pull on if you want to pass this Prop.

  3. Because after his four year term, it’ll be a Dem seat for perpetuity after this bullshit bankrupts our state and drives new businesses and tourism in to other states.

    If these propositions pass, Republicans are gonna own this lock, stock and barrel and they are gonna rue the day they did.

    1. When I read your comments it seems like you are throwing in the towel on Colorado.

      California is a beautiful state, they have high taxes, a massive government and its warm all year round south of the big sur.

      1. That’s what you got from my comment? Hmmm. Reading comprehension is a wonderful thing, Libertard. Someday, I hope you’ll have the opportunity to experience it.

        1. No I clearly got your intent.  If this passes you’re hoping for Gov McInnis for 4 years, then Democrats to infinity.

          I just sensed an underlying mood of dispair in your comments.  As I said before, it stuns me that Democrat leaders have not gone to the ballot to secure the peoples will to fix these budget problems they put forward as the apocalypse 3 years ago.

          You came into office crying about the lack of $s in the state and local coffers.  My simple question is why has democrat leadership failed the people.  They were elected to lead, but they haven’t on this top priority issue.  

          Therefore, it is fair to ask the GOP what their solution might be.  Apparently for them, that includes taking a deeper whack at the budget.

          1. and even give you the benefit of the doubt that you’re being sincere and give you an honest reply. I’m not despairing. I’m just saddened that Republicans are willing to drive our state and our economy into the ground.

            On one point, I do agree with you–I think the Democratic leadership had a moral responsibility to go to the voters and ask for a repeal of TABOR. They haven’t and we are clearly reaping the results. However, let’s not forget that we also have one of the lowest unemployment rates of any state in the Union and that we have attracted, under the current administration, foreign businesses to our state.

            And yes, it’s absolutely fair to ask the GOP what their solution is but this hardly strikes me as a solution. Frankly, it appears to do nothing more than compound the problem at hand.

          2. My understanding is that if you tried to put a question on the ballot that just said, “All provisions of TABOR are hereby repealed,” it would be struck down by the courts since it violates the single-issue provision. TABOR proponents basically burned the bridge after they crossed it.

                1. near future, so I’m guessing Dems would have to go the initiative routes. But what, specifically, would they have to ask for to basically repeal TABOR altogether?

                    1. Good luck getting all of a package of dozens of referenda to pass (see Ref C&D for example – C passed, D did not).  We’ll end up in just as bad a mess as we are in now.  Possibly worse.

                      I’m not against a two-pronged strategy – go for a CC for the long term, and try to patch things up with referenda / initiatives in the meantime.

                    2. I’m sorry. My comment sounded snippy and I really didn’t mean it that way. I just think we can’t afford to wait for 3 years for a Constitutional Convention to fix our budget. That was my point, but it was badly made and I apologize, G.  

                    3. seriously, G Pulivizk

                      A constitutioanl convention was hard enough the last time. My biggest bitch now that”ve involved in activism and politics is this representatitve form of gov;t requires so much damn showing up

                      Tell ya what- you get the ball rolling, I’ll show up late.

                      Meanwhile- let’s redistrict CD5 out of exisitence…. or get back to the same approximate proportionate representation we had 100 years ago.

                      1910 there was approx 100 million Americans. 435 Senators & Representatives.

                      2010    300 million Americans.  and 1305 Senators and reps, right? Nope- still 435.  The ultimate power grab- you’d think the right would be all over this. Newt, Boehner, Lott, DeLay, Gramm- universally hate it.  (See- deep down they know more reps means way more D reps than R;s)

                2. 1-take the single subject amendment out of the constitution, paving the way for tabor repeal

                  2-take two or three shots at TABOR   Most of its provisions fall under just a few subjects.

                  1. IIRC, the single subject amendment was put in the constitution to prevent another TABOR.  TABOR was sold as a measure to put all tax increases up for a vote; nobody talked much about the spending restrictions, ratchet effect, etc.  The requirement that new taxes and tax increases have to be voted on hasn’t really posed much of a problem, but the stealth provisions have put us in this hammerlock.  Single subject was created to prevent future stealth attacks like we saw wih TABOR.  Remove single subject and we can get rid of TABOR, but we’ll open the door to God-knows-how-many sons-of-TABOR.

      2. The lowest taxes of any state by almost any measure.  But attracting new employeres there is tough.

        Or then there’s Illinois- way, way higher taxes than SD – or CO – and yet their economic development just keeps doing fine.

        It isn’t always about a race to the bottom for taxes.

        1. so they could be closer to DC…… D’oh.

          We have natural resources too, you exploit your assets. E-N-E-R-G-Y and that includes sustainable and scalable wind, oil, sun, gas, nukes, uranium, hydro…

    2. and will be his downfall, that’s for sure.

      I’m just laughing. After the decks are cleared for the anointed one, he’s damned if he do, and damned if he don’t.

      I’m going to enjoy seeing him twist slowly in the wind.  

      1. Bad time to take office, in the middle of the worst economy since the Great Depression. If it doesn’t turn around, it almost guarantees Obama one term.

        And if this passes, no matter how much the economy turns around, this guarantees a complete gutting of the budget, a one term Republican governor and a whole lot of pain and loss on the Republican legislative level in 2012.  

    1. does not mean there’s much chance we will have one any time soon. Other solutions will have to be found and things will probably have to get worse before people stop buying the rightie line that we can still have great schools, services and infrastructure while cutting taxes to the bone if the government… I don’t know… just reuses aluminum foil and string or something?  

  4. Sounds like some auto dealers and rental companies have a vested interest in this passing.

    Especially eliminating sales taxes on rental vehicles:  what’s the reason for this one?

  5. If 101 doens’t pass, it will be reintroduced with minor modification. again and again until it passes.

    It’s clear that part of the intent is to restore the pre-Ref C ratchet and the corresponding revenue limits.

    It’s also clear that a lot of Colorado voters only need to hear “potential tax decrease” and they are for it.

    Despite reasonable people suggesting the R’s are past the kind of wedge issue strategies of the recent past in order to motivate turnout of specific demos, I think that’s part of the goal of this and the other 4 or 5 ballot measures coming.

    I also think it could backfire as the party of no, goes on to become the party of “oh no”

    At present I think the personhood thing fails- this and the other four pass next year.

    1. Countering that you have Boulder where all they have to hear is tax increase to vote for an initiative.

      We’ll fight these out. And I think as we do we’ll have a decent discussion about what cuts like this mean. It could work out quite well.

  6. I oppose this initiative, as anyone who thinks the state should provide basic services ought to, but I also think it is likely to pass.

    Here’s why: there are too many examples of government officials making spending decisions the public either doesn’t understand or outright opposes.

    One example is the recent Denver Public Schools fiasco involving the therapist. Sure, that’s not state government, but Joe and Jane aren’t going to be thinking about that detail.

    And the state has is own problems. Gov. Ritter has done a commendable job trying to balance the budget while preserving basic services, but he has not proposed any fundamental reorganization or restructuring. I think this thing could be headed off most effectively if the governor and the Democratic legislature would do just that.

    How?

    Well, the first thing to do is eliminate the Department of Local Affairs. There is just no reasonable argument that this agency is necessary.

    Second, cut funding for the state Department of Education by at least twenty-five percent, and possibly as much as fifty percent. Do not propose more cuts to higher education. At the K-12 level, in terms of school operations, require that no school have more than one assistant principal and specify that no state money may be used to pay the salaries of athletic directors or athletic coaches who do not have teaching obligations and who are not “highly qualified” to teach an academic subject, as required by federal law. Require all districts to eliminate any policies that have the effect of capping the number of charter schools of of imposing unreasonable barriers to charter school approval.

    Third, agree to support a statute that makes clear that all future fee increases and revocations or reductions of tax credits must be approved by voters before they take effect.

    Fourth, cut the salaries of all government elected officials by twenty-five percent.

    Fifth, reduce the number of judges on the state court of appeals from 22 to 15 and on the supreme court from seven to five. Consolidate the district and county courts into one level of trial court, thus eliminating duplication of general jurisdiction judges, clerks of court, and other courthouse staff.

    Sixth, consolidate the Colorado Bureau of Investigation and the Colorado State Patrol into one agency.

    Seventh, consolidate the Department of Education, Department of Higher Education, all university and college Boards of Regents and Colorado Commission on Higher Education, eliminating duplicative staff positions and the CCHE. Consolidate the various university governing boards (regents) into one statewide, university system Board of Regents and change their members to appointees of the governor with state senate approval. That will cut out the additional expense of an election for them.

    Eighth, cut the salaries of all statewide elected officials by twenty-five percent. Require that the executive branch agencies, other than those mentioned above and including the governor’s office, cut staffing levels by twenty-five percent and that the General Assembly’s staff be cut by ten percent.

    Ninth, and this is a big one, consolidate the state’s counties. Too many of them are simply too under-populated, or too small in terms of geographic size, to justify having a separate county-level government. From the current 66 counties, consolidate to no more than thirty. This won’t have a direct impact on the state budget, but it may well have a significant impact on property taxes throughout the state. With larger tax bases to support core services, counties would not have to assess as high a tax rate as they currently do.

    Tenth, enact a statute that bans any government agency at any level, or any elected official, from expending public money to pay for public accommodations at conferences when publicly-owned facilities that are suitable for the conference are available. Impose a strict cap on hotel and per diem expenses associated with such conferences, assuring that the attendee can only use public money to afford a mid-grade motel at best. Forbid any expenditure of taxpayer money, at any level of government, to pay for lobbyists or for services that are available through the government itself (such as therapists). Prohibit all single-source contracts at all levels of government except when necessary to remedy a public emergency or when no more than one bidder is available to perform a service.

    Finally, the General Assembly should pass a resolution calling on Congress to enact a balanced budget amendment to the U.S. Constitution.

    I think this plan, which is a strong eleven-point program for fiscal conservatism, would head off much of the steam that may be behind Proposition 101 and its sister measures.

    If something dramatic isn’t done, I think they’ll pass despite the damaging effect they’d have on state government. Too much of the public simply lacks confidence in government’s ability to restrain spending in appropriate ways.  

    1. #1 – There may be areas within DOLA that could be taken away or moved to another agency but to get rid of DOLA would mean loss of jobs and loss of services to local governments around the state. There was a Director not too many years ago that tried to do just this, however, the pushback from a variety of interests stopped it.

      #2 – Where this may help in some neighborhoods where parents could help pony up money it would result in overworked administrators and lack of consistency and standardization for educating children. Cherry Creek = good education; North Denver = not so much.

      #3 – Possible, if you never want to see additional revenue coming in to cover the expenses of the people working in the office. Businesses charge overhead for the same reason there are fees in government. It costs money to provide services.

      #4 – Would result in fewer qualified people in government. And/or increase the number of rich white guys who are beholden to nobody to keep their job and are more concerned with their political career than with governing.

      #5 – Maybe not a bad idea to reduce the number of appointments and personnel in the judicial branch, but expect an even further wait on cases being heard in this state and longer stays in prison and jails while defendants wait.

      #6 – Makes sense

      #7 – Could happen but we wouldn’t be saving money. It would just create a larger department. Although, I like the idea of not listing all the people on election ballots.

      #8 – see #4

      #9 – Hardly possible. Counties are listed in the Constitution and the number of statutory and administrative changes necessary to make this happen would be a governing nightmare.

      #10 – Understand where you came up with this but for a cost saving measure, would probably do more harm than good.

      Finally – pass all the resolutions you want, they don’t mean anything.

      You argue that the public feels the government spends too much money in inappropriate ways. That may be true for some but the broad brush approach to defining public ideas about government is, well, pretty broad.

      How about if I said the public simply lacks confidence in the banks and insurance companies’ ability to restrain spending in appropriate ways. Big businesses too.

      I suppose your eleven point plan would work for those organizations as well?

      Simply put, it is easy to come up with an 11 or 13 or 8 point plan for anything and people shouldn’t be faulted for offering suggestions. The problem is when the plan meets the real world. In the real world change happens incrementally and bold changes like you listed are just that, bold changes full of sound and fury, signifying, well, signifying that it must be an election year…

      1. Basically, ninety percent of my proposal is either “too hard” or would, God forbid, result in fewer government employees or reduce the bureaucratization of our education system or shift blame from the private sector . . . .

        Look, maybe not all of these ideas are the best ways to proceed. But the point is, there is a significant percentage of Colorado’s electorate – maybe even a majority – that believes the state does not allocate its revenue wisely, that government in general does not make good choices when it comes to spending, and does not necessarily understand why the existing levels of spending at all agencies and all levels of government are appropriate (if, in fact, they are).

        The only way to convince them not to go for Prop 101 and its two cousins will be to make the case that government is spending money wisely. To do that, I think it’s essential to be willing to propose major reforms at a time when the state is in a budget crisis. If the public sees that legislators and the governor are willing to make hard choices – I mean really hard choices, not moving the beans around – and that fundamental changes in practices that undermine confidence are coming, then they may well vote against these initiatives.

        If not, then they’ll pass. It’s that plain.

        1. is that you believe your set of solutions, even if enacted exactly as you want, would somehow solve all future problems. That it would somehow get the teabaggers to stop wanting any other taxes cut. That’s absurd.

          1. you seem to be saying that the legislature’s majority and Ritter should just say they’ve gone as far as they can and, since there’s nothing that will convince people who like tax cuts not to support them, lay down their marker there.

            I think that’s risky.

            Besides, even if a fiscal reform package like my proposal or some other isn’t going to buy off the Tea Party people, it could well bring needed management improvements and future fiscal stability and take away complaints that Democrats can’t ever seriously cut spending and can’t be fiscally responsible.

            You and I know that’s not true, but too many people don’t know that.

            1. hasn’t had any effect on that impression. Doing the same thing but more doesn’t seem likely to produce results here. In fact it just reinforces the impression, since the first thing people conclude is that Democrats are doing it as a defensive move, which just proves the point of the teabaggers. “They’re cutting spending because they know we were right to criticize them!”

        2. Most of your proposal isn’t “too hard” – it’s unworkable or generally unfair to the populace at large.

          Some examples:

          4. Reducing legislative salaries from the current $30k to $23k would make being a legislator into something of a punishment, or something rich people do for the power trip and ability to manipulate government for their own ends.  Bad Idea.

          10. Pricing larger hotels out of budget for conferences just means eliminating conferences of any size.  Mid-budget and lower hotels rarely have conference space for any significant number of attendees.

          9.  As Car notes, consolidating counties is nigh on impossible without rewriting the Constitution.  (You’d have to get the county residents to agree to the merger, which they won’t…)

  7. It is actually the other way around.  The private sector is far more corrupt, greedy and incompetent than the government. Think Enron, WorldCom, Merrill Lynch, Bank of America, Citigroup and AIG to name a few.   And our government has been taken over by corporations.  Americans are being dumbed down and we will continue to decline until we wake up and realize that we have been sold talking points that have no basis in reality.  I am at a loss when I talk to seemingly educated people and they have bought the talking points of the right wing extremists like the pilot I spoke with two days ago who had a conversation with Representative Mike Coffman about the new healthcare bill before Congress.  He was talking about government takeover of healthcare.  He didn’t have a clue about what he was talking about and yet he’s as passionate and righteous as a member of the tea baggers.  It’s discouraging to say the least but it’s far worse than people realize because we have lost our competitiveness worldwide and we will continue to decline but it doesn’t have to be so.  We can come back but not with laws like these.  We need to save capitalism by investing in us and our schools and infrastructure.  

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